Employers Plan to Cut GLP-1 Drug Coverage
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jun 11 2026
0mins
Source: Newsfilter
- Employer Coverage Changes: According to the Business Group on Health, about 10% of employers plan to drop coverage for GLP-1 weight-loss drugs by 2027, despite 67% of large employers still covering them in 2026, which could lead to increased healthcare costs for employees.
- Rising Drug Demand: The introduction of oral options has significantly increased demand for GLP-1 drugs, particularly Wegovy and Foundayo, which can reduce weight by 11% and 14% respectively, attracting more patients who have never tried these medications, thereby raising employer costs.
- Insurance Policy Adjustments: Cigna ceased coverage for weight-loss medications for its employees in July, prompting them to seek discounted prices directly from drug manufacturers' websites, a shift that may influence future drug coverage policies.
- Market Cost Pressure: Despite a decrease in drug prices, the growing patient population continues to exert significant cost pressure on employers, with industry experts anticipating further reductions in GLP-1 coverage next year.
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Analyst Views on LLY
Wall Street analysts forecast LLY stock price to rise
20 Analyst Rating
18 Buy
2 Hold
0 Sell
Strong Buy
Current: 1112.000
Low
950.00
Averages
1192
High
1500
Current: 1112.000
Low
950.00
Averages
1192
High
1500
About LLY
Eli Lilly and Company is a medicine company, which discovers, develops, manufactures, and market products in a single business segment called human pharmaceutical products. The Company manufacture and distribute its products through facilities in the United States, including Puerto Rico, and in Europe and Asia. The Company’s products are sold in approximately 90 countries. Its Cardiometabolic Health products Basaglar; Humalog, Humalog Mix 75/25, Humalog U-100, Humalog U-200, Humalog Mix 50/50, insulin lispro, and others; Humulin, Humulin 70/30, and others; Jardiance; Mounjaro; Trulicity; Zepbound, and others. Its oncology products include Cyramza, Erbitux, Tyvyt, Verzenio, Retevmo, Jaypirca, and others. Its immunology products include Ebglyss, Olumiant, Omvoh, and Taltz. Its neuroscience products include Emgality and Kisunla. Its LillyDirect, a direct-to-patient digital health care platform, provides delivery of select Lilly medicines dispensed by third-party pharmacies to patients.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- New Oncology Platform: By acquiring Kelonia Therapeutics, Lilly deepens its position in oncology cell therapy, with an upfront payment of $3.3 billion and potential milestone payments of up to $7 billion, which could drive future growth.
- Expansion in Blood Cancer: The acquisition of Ajax Therapeutics will provide Lilly with a JAK2 inhibitor for bone marrow cancer, with a total deal value of up to $2.3 billion, enhancing its technological and data capabilities in blood cancer treatment.
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- Dividend Growth Appeal: Although Eli Lilly's dividend yield is around 0.6%, the company has achieved a remarkable 239% increase in dividends over the past decade, showcasing its potential for healthy dividend growth, which attracts income-seeking investors and enhances its investment appeal.
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See More
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- Intensifying Market Competition: Novo Nordisk's Wegovy pill has quickly reached three million prescriptions, indicating consumer preference for oral medications, despite competition from Eli Lilly's new drug Foundayo, which appears less effective and faces a tougher market introduction.
- Transition Year Challenges: Novo Nordisk's stock has plummeted 70% from its 2024 highs, with the company warning of a difficult 2026 due to drug price reductions in the U.S. and generic competition in India, leading to a bearish sentiment among investors in the short term.
- Long-Term Growth Potential: Despite the uncertain short-term outlook, Novo Nordisk anticipates accelerated growth as demand for GLP-1 drugs increases, particularly with the rapid uptake of the Wegovy pill indicating market acceptance and potential for future expansion.
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See More
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- Pricing Strategy Adjustment: Novo Nordisk has agreed to lower drug prices in the U.S. market and faces generic competition in India, a strategy aimed at addressing potential difficulties in 2026; despite a 70% stock price drop in the short term, long-term growth potential remains.
- Shift in Investor Focus: Although Wall Street's confidence in Novo Nordisk has waned, with concerns about its future, the company believes growth will accelerate as demand for GLP-1 drugs increases, indicating that the market may be underestimating its value and growth potential.
- Attracting Income Investors: With a price-to-earnings ratio of 10x, significantly lower than Eli Lilly's 40x, and a 4.1% dividend yield, Novo Nordisk appeals to income-focused investors, highlighting its long-term opportunities in the weight-loss drug market.
See More
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- Intensifying Competition: While Novo Nordisk leads in the GLP-1 drug market, competitor Eli Lilly has launched the oral drug Foundayo, which, despite being less effective, poses a threat to Novo Nordisk, particularly in terms of market education and consumer acceptance.
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See More
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- New Technology Acquisition: By acquiring CrossBridge Bio, Lilly gains access to a dual-payload antibody-drug conjugate platform, which, despite lacking clinical candidates, could open new avenues for cancer drug development in the future.
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See More
